Kroger Agrees to Pay Over $1 Billion in Settlement for Opioid Lawsuits
Supermarket chain Kroger has reached a settlement of over $1 billion in lawsuits that accused the company of failing to monitor suspicious orders of addictive pain pills, contributing to the nation’s opioid crisis. The settlement includes payments of up to $1.2 billion to states and local governments over 11 years, as well as $36 million to Native American tribes.
This settlement adds to the more than $50 billion already obtained in settlements by state and local governments in lawsuits against opioid-industry players. These companies have been accused of flooding the nation with addictive pills, despite knowledge of their diversion to the black market.
The funds from the settlement will be used by governments to combat the opioid crisis and save lives. This includes initiatives such as providing drugs to reverse overdoses, enhancing addiction treatment services, and launching education campaigns.
Although the number of deaths from prescription-pill overdoses has decreased, the nation’s addiction crisis continues to be fueled by illicit fentanyl, which is manufactured in secret labs in Mexico and smuggled into the United States. Federal estimates indicate that more than 110,000 people died from overdoses in 2022, with two-thirds of the deaths attributed to synthetic opioids like fentanyl.
Attorneys representing states and other governments praised this settlement as the first involving regional supermarket pharmacies. They also emphasized their intention to continue aggressively litigating against other regional pharmacy defendants whose cases remain pending.
Local governments in 33 states, along with Washington D.C., have the option to participate in the settlement. Payments are expected to commence in December.
Kroger, which operates over 2,200 pharmacies across the country, did not admit any wrongdoing but referred to the settlement as a “milestone” in resolving opioid-related lawsuits. The company stated that it considers the settlement an important step in its efforts to address the pending opioid litigation and support abatement initiatives.
The announcement of the settlement coincides with Kroger’s pursuit of a merger with Albertsons, another major grocery chain in the United States. The companies have also agreed to sell 413 stores to C&S Wholesale Grocers in an effort to address antitrust concerns raised by the Federal Trade Commission.
Kroger expects to incur a loss of $1.4 billion during the second quarter of 2023 as a result of the settlement. However, the company’s Chief Financial Officer, Gary Millerchip, reassured investors that the settlement and subsequent payments will not impact their ability to complete the proposed merger.
In recent months, Kroger has settled opioid claims with West Virginia and New Mexico for $68 million and $58.5 million, respectively.
Lawsuits filed by states have alleged that chain pharmacies, including Kroger, failed to identify suspicious orders of addictive pain pills. For example, Salt Lake County in Utah claimed in a recent lawsuit that Kroger flooded the county with over 69 million doses of hydrocodone and oxycodone pills between 2006 and 2014.
The Drug Enforcement Administration requires companies to report suspicious orders of controlled substances. The lawsuit accused Kroger of acting as a distributor and dispenser of these pills, while neglecting to take meaningful action to stop their flow into communities, instead profiting from the oversupply.
Plaintiffs’ attorney Jeff Gaddy, from Levin Papantonio Rafferty, expressed that the settlement is another step forward in holding accountable all entities involved in the opioid epidemic, which has claimed countless lives and caused significant harm.
Additional reporting contributed by Jaclyn Peiser.